Big projects are key to IT growth

Spending on IT projects will continue to grow in the second half of 2005, despite uncertainty about the economy and anxiety caused by the terror attacks on London, according to UK IT leaders.

Spending on IT projects will continue to grow in the second half of 2005, despite uncertainty about the economy and anxiety caused by the terror attacks on London, according to UK IT leaders.

Ben Booth, chairman of IT directors group Elite and CIO at Mori, said the challenge for IT departments across the UK for the remainder of the year was to be "flexible but not profligate".

IT directors have to balance delivering new systems with bearing down on costs.

"In our business, we have to have elasticity in what we do. We have to accommodate growth; we cannot screw costs down entirely because we have to be flexible," said Booth.

Infrastructure projects to deliver the flexibility required by the business include IP telephony, software upgrades, e-commerce and server consolidation. These will add to an overall 4.6% growth in UK IT spending in 2005, according to Kris Wicka, managing director of Kew Associates, which produces the Computer Weekly IT Expenditure Report.

Colin Simpson, group systems  manager at brewer Fuller Smith and Turner, is pushing through projects involving chip and Pin, mobile applications, server consolidation and e-commerce. In addition, demand continues to put pressure on existing IT service levels, he said.

"A few budgets are stretching a bit and there is reasonable pressure to control costs. Storage is an ongoing problem and climbing - our storage is increasing by 3% to 4% a month," said Simpson.

Business development is a key focus in financial services organisations. Jerome Gudgeon, vice- president of technology at American Express Financial Services Europe, said, "We are looking to enhance the roll-out of our payments platform. We might be replacing a legacy system or putting it into a fresh market."

John Worth, chief information officer at financial services firm Prudential, said, "I have three tasks: one is to improve service. Reducing cost is another. We are looking at every opportunity we can. The third is delivering on business change projects."

Demonstrating return on investment will be important in the public sector. Richard Steel, head of ICT at Newham Council, said a continuing focus was IP convergence and IP infrastructure. "Infrastructure is key to support data storage and the transmission of information," he said.

Now that Newham has the IT systems to meet e-government targets, Steel said his key task was to drive payback by getting more people to use the systems.

Joe van Valkenburgh, director of information management at Network Rail, is in the middle of a Windows XP Active Directory roll-out to 16,500 desktops.

Although most IT directors are confident of hanging on to their budget allocations for the remainder of 2005, van Valkenburgh said, "I am giving some of my budget back this year. My capital expenditure budget is £138m. I expected to spend £90m this year."

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